Employment Boost and Tax Relief for Restaurant Industry Hit Hard by Pandemic

SACRAMENTO – Assemblymember Carlos Villapudua (D-Stockton) introduced AB 2035 this week to provide employment and tax relief for California’s restaurant and bar industry by extending eligibility to them for the California New Employment Credit (NEC) Program.

“Our restaurants and bars have faced disproportionate challenges throughout the pandemic that has left many establishments in financial turmoil,” said Assemblymember Villapudua. “Through the existing NEC Program, we can provide much-needed relief for this industry that finds itself in dire circumstances at this moment.”

The NEC Program assists companies that operate in regions with high unemployment rates by offering tax credits based on the number of workers hired. Additional benefits can be earned by hiring veterans or individuals who are more at risk of chronic unemployment. Unfortunately, the program currently excludes businesses in the restaurant and bar industry, which has suffered from astounding employment and financial difficulties in the wake of the pandemic.

Current data from the Independent Restaurant Coalition estimates that over 86 percent of independent restaurants and bars that did not receive funding from the federal Restaurant Revitalization Fund (RRF) grant program are at risk of permanently closing. The industry is responsible for 9 percent of California’s workforce (1.6 million out of 17.6 million employees across the state) with an estimated 350,000 restaurant jobs remaining unfilled.

“The hospitality workforce is generally made up of lower-to-middle income workers who have been impacted by the pandemic at great effects,” said Assemblymember Villapudua. “The wellbeing of this sector is critical to the overall wellbeing of our economy, and California has a responsibility to ensure our recovery is equitable and sustainable for generations to come.”

The NEC Program would provide enormous relief for our restaurants and bars as they aim to increase their staffing levels and offer greater employment opportunities to our veterans and other at-risk populations.